Panama Company Incorporation: Quick Start Guide
Trajan Bolderovsky
Panama company incorporation is controlled by the government of Panama through a public registry system with the document authentication process in the hands of public notaries. Panama law states that anyone acting as an organizer for a Panama corporation must appear before a public notary to validate the corporation documents so they can be legalized.
If you want to incorporate a Panama company but you live outside of Panama you will need to utilize the services of a local Panama law firm, trust company or other professional services firm that has access to lawyer services. These companies will draft all of the required documents as well as collect your personal information and due diligence as required by law. In order to meet these requirements a law firm will ask you for; a name and two alternative names for your Panama corporation.
The name that is registered can be in any language but it must end with one of; Corp., Corporation, S.A. or Inc. A Panama company can be registered for just about any purpose with ease and without the need to explain in great detail what it is for to anyone. There are no capital requirements to pay in making it relatively inexpensive to set up.
If you incorporate your Panama corporation with less than $10,000 you will need to pay a $300 per year registration fee which is due annually. You will need to use a minimum of 3 directors which can be anyone from just about anywhere. The caveat example is if you are interested in registering the corporation anonymously in bearer share format you will need to use the services of nominee directors. These can be supplied by most Panama law firms but make sure when you order your corporate package that it includes undated resignation letters from these nominees or you run the risk of someone seizing control of your company that you don't even know.
Your company will also need a president, treasurer, and secretary, because they are required. You can choose anyone you want to fill these positions. It is okay for one person to hold more than one office, but it is advisable that the president hold only one. You will also select one of these officers to act as vice president. You may have other vice presidents, but it isn't necessary. You may also declare other offices if you wish. The company can be based anywhere in the world, but it is advisable to stick with Panama or another tax haven as the listed domicile. The Panamanian Company you are creating has to have a Registered Agent domiciled in Panama. The agent has to be a practicing lawyer or law firm.
You can incorporate your Panama company for a short time or indefinitely with the latter being the more common option. Typically, a Panama law firm will take about a week to form your offshore company once they have received all of the correct notarized documents from the client.
Normally it is not advisable to purchase an "off the shelf" corporation in Panama because it begs the question "why is the person who registered it not using it anymore and what were they doing with it". In certain cases you may want your company to appear older than it really is but this starts to get into a dark world of half truths and lies that can get you thrown in jail if you are not careful.
When registering your corporation it is best to select a firm that operates on a flat fee basis, because then you know what you are getting into and can make adjustments to your finances accordingly. When you are looking for a company to work with it is important to keep in mind that the entire cost should never exceed $ 3000.00 including all expenses. To renew and register it should never cost more than $800 total.
Be wary of packages that look "too good to be true". There are a number of little gotcha's where a law firm will try to make their package cost less than a competitor's but what they don't tell you is if you try to get a bank account with the corporation they register you will be turned down.
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